Refinance question for BRRRR

[Joe Pirapakaran]

Wondering if anyone can provide some insight

So your done rehabbing your deal and ready to refinance 

lets just say, you owe your private money lender 140k thats purchase, rehab and interest 

the house appraises for 200k.  With a 80% cash out refinance your loan amount is 160k

Are you only writing a loan for the money you owe the lender ? (140k) or the full 80% of the ARV (160k)

what are there pros and cons of both  ? 

[River Sava]

Hey Joe -

Really depends on your strategy there isn't a straight forward answer here as others have commented. 

Loan would be based on ARV and typically at 75% LTV for a cash out if you are looking to pull as much equity out.

However, if you're debt outstanding is significant then a rate term refi might make more sense if you plan to hold onto it for a bit.